JMP maintains Halozyme stock $78 target amid Merck challenge

On Thursday, JMP Securities maintained its Market Outperform rating and $78.00 price target for Halozyme Therapeutics (NASDAQ:HALO) stock. The reaffirmation follows reports that pharmaceutical giant Merck (NSE:PROR) is contesting Halozyme’s patents related to its subcutaneous Keytruda candidate. Merck has submitted Post Grant Review petitions to the Patent Trial and Appeal Board (PTAB) for patents that include Halozyme’s modified hyaluronidases, which are critical components of the company’s proprietary drug-delivery technology.

Halozyme provided commentary on the situation during an investor presentation today. The company’s remarks bolstered JMP’s perspective that the patent dispute could be a significant positive influence on Halozyme’s stock value, particularly looking ahead to 2025. The company’s strong market position is reflected in its impressive 22.44% revenue growth and healthy profit margins of 76.51%. InvestingPro analysis reveals 12 additional key insights about Halozyme’s financial strength and market position.

The patents in question are central to Halozyme’s technology platform, which allows for subcutaneous delivery of intravenous drugs, potentially simplifying administration and improving patient experience. The challenge by Merck represents a pivotal moment for Halozyme as it defends its intellectual property rights related to this innovative drug-delivery method.

The investor presentation by Halozyme aimed to reassure investors about the strength of their patent portfolio and the potential growth opportunities for the company. Despite the ongoing legal proceedings, JMP analysts continue to see a favorable outlook for the stock, emphasizing the long-term potential of Halozyme’s technology and market position.

The current situation with Merck will likely be closely watched by investors and industry stakeholders, as the outcome could have implications for Halozyme’s future revenue streams and strategic partnerships. The dispute underscores the competitive nature of the biotechnology sector and the importance of patent protection in maintaining a company’s edge in the market.

In other recent news, Halozyme Therapeutics reported a strong financial performance for the fourth quarter, surpassing analyst expectations with adjusted earnings per share of $1.26 and revenue of $298 million, compared to the consensus forecasts of $1.15 and $294.15 million, respectively. Total (EPA:TTEF) revenue for 2024 reached $1.015 billion, marking a 22% increase from the previous year and exceeding $1 billion for the first time. The company’s royalty revenue was a significant contributor, with a 40% surge to $170.4 million in the fourth quarter, driven by products like DARZALEX SC, VYVGART Hytrulo, and Phesgo.

Following these results, H.C. Wainwright raised its price target for Halozyme to $72, maintaining a Buy rating, while JMP Securities increased their target to $78, reiterating a Market Outperform rating. Both firms noted the company’s robust royalty streams and share repurchase program as positive factors. Halozyme’s guidance for 2025 projects total revenue between $1.15 billion and $1.225 billion, with adjusted earnings per share expected to range from $4.95 to $5.35. The company also emphasized the potential of its ENHANZE technology and recent regulatory approvals as drivers for continued growth.

These developments underscore the company’s optimistic outlook and strategic positioning for future success.

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